I have a problem I can't solve and I need help =)

I have this model

Attachment 27992

So=75 K=80 r=0,02 sigma=0,25 T=1

which gives me: ln(75/80)+(0,002-(1/2*o,25^{2})*1/o,25*1 = -0,3032

Since its probability it can't be negative...??

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- Apr 17th 2013, 04:19 AManna88Probability
I have a problem I can't solve and I need help =)

I have this model

Attachment 27992

So=75 K=80 r=0,02 sigma=0,25 T=1

which gives me: ln(75/80)+(0,002-(1/2*o,25^{2})*1/o,25*1 = -0,3032

Since its probability it can't be negative...?? - Apr 17th 2013, 12:10 PMShakarriRe: Probability
Is part of that equation $\displaystyle (r-\frac{1}{2}\cdot \sigma^2)$ or $\displaystyle (r-\frac{1}{2\sigma^2})$ or $\displaystyle (r-\frac{1}{2})\cdot \sigma^2$ or $\displaystyle \frac{r-1}{2\sigma^2}$